A recent decision of the Federal Court of Australia has
placed a sharp focus on the use of credence claims (that is, claims
which involve a representation of a premium or special
characteristic about a product) in marketing in the Food and
In a victory for common sense and consumers, the
Australian Federal Court has ruled that Coles breached the
Australian Consumer Law by labelling its par-baked bread
"fresh" in ACCC v Coles Supermarkets Australia Pty Ltd
 FCA 634.
On 18 June 2014, the Federal Court of Australia ruled that Coles
engaged in misleading and deceptive conduct when marketing its
par-baked bread. Par-baked bread is prepared for sale by applying
heat in an oven to partly baked dough that has been snap frozen and
stored for a period of time. The bread was partially baked and
frozen off-site and then transported to the Coles supermarkets
where the baking process was finished. The par-baked bread was
promoted by Coles using the terms "baked today, sold
today", "freshly baked" and in some cases
"Freshly Baked in-store".
Coles' in-store bakeries use three methods of baking:
preparing bread 'from scratch', applying heat in an oven to
frozen dough and applying heat in an oven to par-baked bread that
has been snap frozen and stored for a period of time. The ACCC took
issue with the "fresh" descriptions of bread prepared
using the third process.
The ACCC asserted that Coles had represented frozen and
par-baked products as being baked from scratch or entirely baked on
the day they were offered for sale.
THE IMPORTANCE OF CONTEXT
The Court placed significant emphasis on the role of context
when determining whether conduct is likely to mislead or deceive.
In the Coles context, the claim did not convey a message that only
some baking had taken place that day and initial baking of a
substantial kind took place weeks or months before at other
locations (including Ireland).
The meaning of the word "fresh" will differ depending
on the context in which it is used. It may connote notions of
recency and/or notions of being "unprocessed" or not
interfered with by man. The danger lies in the multitude of
possible meanings, only one of which needs to be potentially
misleading in order to fall foul of the Australian Consumer
The FCA considered that to reasonable and ordinary people, the
way the phrase "Baked today, sold today" was used would
convey that the entire baking process took place that day. The
Court found that those representations were misleading.
The Court commented that Coles needed to make clear that
"freshly baked" actually means the completion of the
baking process of frozen product prepared off site by suppliers as
opposed to the entire 'from scratch' baking process.
WHAT DOES THE DECISION MEAN FOR INDUSTRY PARTICIPANTS?
Participants in the food and beverage industry need to make sure
that they have adequate substantiation for the credence claims they
make about their products and to exercise caution when using broad
laudatory words and phrases that are intended to influence the
buying decisions of consumers. Common examples of the use of the
word "fresh" in different contexts capable of different
meanings include "garden fresh", "fresh from the
farm", "freshly squeezed" and "fresh
It is now not always enough to simply demonstrate the recency of
the relevant preparatory process in order to avoid misleading
consumers by use of the word "Fresh". Your ingredients
must often be fresh too!.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).